IMF spokesperson Julie Kozack said the U.S. tariffs on Mexico and Canada and new duties on China, along with countermeasures announced by China and Canada, and potentially Mexico, amounted to significant new developments.
She said the IMF would release a more comprehensive assessment of the impact of the shift in U.S. trade policy for the global economy, and the countries most affected by it, when it releases an updated economic outlook in April, during the spring meetings of the IMF and World Bank in Washington.
Kozack, in the IMF's first substantive comments on recent U.S. trade actions, cited the potential impact on Canada and Mexico, and said it would be critical to assess whether uncertainty in global markets was short-lived or sustained. Historically, she said, "sustained periods of elevated uncertainty can be associated with both households and firms holding back on consumption and investment decisions."
Since taking office on January 20, U.S. President Donald Trump has launched a global trade war by slapping tariffs on China, Canada and Mexico, his country's largest trading partners, although officials are now offering temporary reprieves for Canada and Mexico.
Trump has vowed to announce further trade measures, including reciprocal tariffs to match high tariffs currently levied by India, South Korea and other trading partners.
RECALIBRATION
Kozack said the global economy was in the midst of significant transformations, including the rapid advance of artificial intelligence technologies, changing patterns of capital flows, and a decline in trade - now growing at 3%, half the rate seen from 2000 to 2019 - as an engine of global growth.
It's in this global context that governments are recalibrating their approaches and adjusting policies, Kozack said, noting increased volatility in financial markets and increasing indicators of global uncertainty.
Asked about U.S. bond yields, which have moved lower since the start of 2025, Kozack said that move appeared to indicate that markets may be "reappraising or reassessing their views, particularly on the outlook for monetary policy."
U.S. data is showing weakness, with U.S. tariffs that kicked in this week hurting sentiment inside and outside the world's biggest economy.
While investors have long bet on "U.S. exceptionalism," with the country ahead of others in economic growth, stock prices, AI and other areas, they are now eying opportunities in other countries, including a proposed $1.2 trillion European fiscal bazooka and the emergence of China as a tech race leader.
Kozack said the IMF was also keeping a close eye on developments in the digital currency space after Trump earlier this week announced the names of five digital assets he expects to include in a new U.S. strategic reserve of cryptocurrencies on Sunday, spiking the market value of each.
Trump said in a post on Truth Social that his January executive order on digital assets would create a stockpile of currencies including bitcoin, ether, XRP, solana and cardano. The names had not previously been announced.
